Crowe Company has acquired a building with a loan that requires payments of $20,000 every six months for 5 years.The annual interest rate on the loan is 12%.What is the present value of the
Building?
A)$ 72,096
B)$113,004
C)$147,202
D)$ 86,590
E)$200,000

Question

Quizplus · Accepted Answer

Present Value of an Annuity = Annuity * Interest Factor
Present Value of an Annuity = $20,000 * 7.3601 = $147,202
7.3601 is the interest factor on the Present Value of an Annuity table; n = 5; i = 12%

Crowe Company Has Acquired a Building with a Loan That